The AI Boom Runs on Magnets — Here’s How to Profit

Generally the market throws you a curveball… that’s truly an unlimited alternative. That’s what simply occurred within the uncommon earth sector.

In right now’s Digest takeover, know-how professional Luke Lango of Innovation Investor breaks down uncommon earths – the missed engine of all the AI revolution.

In latest weeks, uncommon earth shares have plunged – not due to fundamentals, however as a result of Washington and Beijing agreed to a brief deal. Traders noticed “truce” and assumed “drawback solved.”

Luke argues the other. The U.S. can’t rely upon China to produce these essential AI elements. China will finally use its leverage once more. And that makes this pullback a present: an opportunity to purchase into America’s AI provide chain earlier than the following wave of demand and federal help hits.

It’s the identical sort of setup Luke and Jonathan Rose spotlighted throughout this week’s Profit Surge Event – a short-term “surge level” that emerges inside main technological megatrends.

So, if you wish to see the chance hidden contained in the uncommon earth selloff – and the shares Luke highlights to play it – right now’s Digest is for you.

Have a superb night,

Jeff Remsburg

Each every so often, markets serve up a paradox so huge it makes your head spin.

That’s what’s taking place proper now with uncommon earth shares — essentially the most important raw-material performs in all the AI revolution.

As soon as the most popular commerce on Wall Road, uncommon earth shares have been crushed in the previous few weeks as a result of Washington and Beijing referred to as a short-term truce on rare-earth exports — and buyers panicked, assuming that meant “disaster averted, drawback solved.”

However right here’s the paradox: that very “peace deal” is what makes this the greatest shopping for alternative of 2025 in one of many world’s most strategically necessary sectors.

As a result of the fact is easy: the U.S. can’t run its AI increase on Chinese language magnets ceaselessly. And this short-term calm doesn’t change the long-term mission — it simply permits you to purchase the way forward for America’s AI provide chain at a reduction.

What Uncommon Earths Really Are

Let’s begin with the fundamentals.

“Uncommon earths” refers to 17 metallic parts — names like neodymium, praseodymium, dysprosium, terbium, and samarium — which have particular magnetic and conductive properties.

They’re the metals that make fashionable know-how transfer.

Uncommon-earth magnets are 20X stronger than odd iron magnets. That’s what lets your electrical automobile speed up quietly, your drone hover steadily, and your robotic arm elevate heavy objects exactly.

If you happen to assume AI is software program, assume once more. The AI financial system runs on bodily intelligence — robots, autonomous automobiles, good factories, AI-powered protection methods — all powered by rare-earth magnets.

These metals are actually what convert digital intelligence into bodily movement.
With out them, AI doesn’t transfer.

Why They’re Crucial to the AI Growth

Each layer of the AI provide chain depends on uncommon earths:

• Information facilities use them in high-efficiency cooling followers, energy converters, and precision servos.
• Humanoid robots want a whole bunch of neodymium-iron-boron (NdFeB) motors to copy human motion.
• Autonomous autos depend on rare-earth magnets in electrical drive items and lidar sensors.
• Vitality methods — from wind generators to grid batteries — rely upon the identical metals for high-torque, low-loss movement.

Which means uncommon earths are the muscle fibers of the AI revolution — as important as GPUs are to AI computation.

The GPU is the mind. The magnet is the muscle.

And you may’t have one with out the opposite.

How They Turned the New Geopolitical Flashpoint

For years, China has held a near-monopoly on uncommon earths. It controls greater than 70% of world mining and over 90% of refining and magnet manufacturing.

That was fantastic once we have been making iPhones and wind generators. It’s not fantastic once we’re making an attempt to construct a brand new technology of AI-powered robots, autos, and protection methods.

In 2024, China reminded everybody who’s boss. It tightened export permits, citing “nationwide safety.” Then, after tensions over Taiwan, it briefly paused shipments of heavy uncommon earths — the precise supplies the U.S. wants for high-temperature magnets utilized in EVs and protection.

Washington panicked. The Division of Protection declared uncommon earths a nationwide safety precedence. And in 2025, the White Home rolled out what insiders are calling the AI Supplies Independence Initiative — a multi-billion-dollar push to fund mining, refining, and magnet vegetation on U.S. soil.

The message was clear: if AI is the brand new arms race, uncommon earths are the ammunition.

The White Home Steps In

In a outstanding shift, the U.S. authorities has gone from speaking about supply-chain independence to really shopping for it.

The White Home, by means of the Pentagon, DOE, and DPA, has:

• Taken direct fairness stakes in U.S. rare-earth producers, together with MP Supplies (MP).
• Supplied grants, loans, and offtake ensures for magnet factories in Texas and Oklahoma.
• Signed provide agreements with allies like Japan and Australia to coordinate non-China rare-earth growth.
• Written “Purchase American” magnet mandates into protection procurement packages.

For many years, America ceded the rare-earth provide chain to China. Now it’s constructing considered one of its personal — at full pace, with Washington’s checkbook extensive open.

In different phrases, the U.S. isn’t simply investing in information facilities and chips. It’s investing within the atoms that make AI potential.

Why Uncommon Earth Shares Simply Crashed

Now, right here’s the place it will get fascinating.

In late October, the U.S. and China reached a brief commerce détente. Beijing agreed to droop sure export restrictions on rare-earth magnets for a 12 months. Wall Road instantly determined that meant the rare-earth “disaster” was over — and rare-earth shares tanked.

MP Supplies, Lynas Uncommon Earths (LYSDY), and different Western suppliers all fell 20–40% in weeks.

However that logic is totally backward.

China didn’t give up its dominance. It simply pressed pause — as a result of even Beijing is aware of that utilizing uncommon earths as a weapon would backfire economically. The structural imbalance hasn’t modified one bit.

The U.S. nonetheless imports almost all of its magnets from China. AI demand remains to be exploding. And the White Home remains to be pouring capital into constructing home capability.

That makes this pullback the proper setup: short-term worry, long-term inevitability.

Why This Is a Uncommon Alternative

Suppose again to the vitality shocks of the Seventies. Each dip in oil stocks was a shopping for alternative as a result of the world nonetheless ran on oil.

Now substitute uncommon earths for oil — and AI for automobiles.

That is the AI industrial revolution. And the world runs on rare-earth magnets.

China’s monopoly makes U.S. provide independence a matter of nationwide survival. Which means funding will hold flowing. Demand will hold rising. Coverage help will continue to grow.

But after this diplomatic “truce,” you should buy the one scaled U.S. rare-earth firm — MP Supplies — at a 30–40% low cost from the place it was a number of months in the past.

The Case for MP Supplies (MP) Inventory

If there’s one firm to personal on this house, it’s MP Supplies inventory.

• It operates the Mountain Go Mine in California — the one built-in rare-earth mine and processing facility in North America.
• It’s constructing out two main U.S. magnet factories — one already on-line in Texas, one other (“Undertaking 10X”) on the best way with capability for 10,000 tons of NdFeB magnets a 12 months.
• It has long-term provide offers with Normal Motors (GM) and Apple (AAPL).
• The U.S. Division of Protection lately took a $400 million most well-liked stake in MP and assured a 10-year minimal value for its key oxide (NdPr).

No different firm within the Western Hemisphere has that sort of coverage safety or vertical integration. MP is actually the nationwide champion of U.S. uncommon earths — the supplies equal of what Nvidia (NVDA) is for chips.

And the size potential right here is big.

MP’s present market cap is round $10 billion. That costs in a single magnet plant and right now’s spot costs. However let’s think about the following decade unfolds because the White Home intends — a completely home, China-independent rare-earth ecosystem constructed round MP.

Right here’s what that world seems like:

1. Capability enlargement: MP’s new “10X” facility ramps to 10,000 tons of magnets per 12 months by 2028. By the early 2030s, MP doubles once more to twenty,000–25,000 tons — supplying not simply GM but additionally robotics, protection, and industrial automation companies.
2. Pricing energy: Premium NdFeB magnets promote for $60,000–$75,000 per ton; high-spec protection/robotics grades command extra.
3. Built-in margins: Vertical integration drives 35–40% EBITDA margins.
4. Income potential: $5–6 billion annual income at scale.
5. EBITDA potential: $2 billion+ per 12 months.
6. Valuation a number of: With authorities offtakes, value flooring, and strategic shortage, MP deserves a 20X a number of — the identical sort of premium we give to monopoly-like strategic suppliers.

Do the mathematics: $2B EBITDA × 20 = $40 billion enterprise worth.

Assume little web debt, and also you’ve acquired a $40B market cap, or roughly 4× right now’s value — probably $220+ per share by the early 2030s.

That’s not speculative; it’s mechanical. It’s what occurs if MP turns into the spine of U.S. rare-earth independence — which, at this level, feels extra like nationwide coverage than company ambition.

Why It’s Nonetheless Early

Most buyers nonetheless consider MP as “a mining inventory.” They’re incorrect.

MP isn’t a miner. It’s a strategic infrastructure firm. It’s constructing the muse for a whole industrial sector the U.S. can not operate with out — not only for EVs, however for each piece of bodily AI {hardware} on the horizon.

That’s why the Division of Protection, Division of Vitality, and the White Home are all writing checks.

That’s why Apple, GM, and protection primes are signing offtakes.

And that’s why the short-term selloff seems like a present.

The AI Growth isn’t slowing down. It’s shifting from the cloud to the world — from software program to machines, from language fashions to humanoid robots, from chips to motors.

And people motors are product of magnets. Magnets constructed from uncommon earths. Uncommon earths managed by one firm America can belief — MP inventory.

The Takeaway

The group simply acquired spooked by geopolitics — once more. The headlines scream “U.S.–China deal!” However beneath the noise, the actual story hasn’t modified. America nonetheless wants its personal AI provide chain, and the AI financial system nonetheless runs on rare-earth magnets — the irreplaceable hyperlink between digital intelligence and bodily movement.

This so-called “peace deal” didn’t finish the rare-earth story. It amplified it. Washington isn’t stepping again; it’s stepping in — remodeling from regulator to enterprise capitalist, pouring billions into the supplies, vitality, and manufacturing base that may safe U.S. tech sovereignty for many years to come back.

Within the brief time period, markets are pricing worry. In the long run, they’re funding AI provide chain independence — one magnet, one motor, one coverage at a time.

That makes the pullback in MP Supplies (MP) one of many smartest and easiest alternatives in all the AI ecosystem. As a result of whereas Wall Road obsesses over GPUs, the actual frontier lies deeper within the stack … the place America is quietly rebuilding the economic muscle that makes AI transfer.

The neatest buyers aren’t ready for the following headline, although; they’re positioning for the following surge.

That’s why I lately teamed up with buying and selling professional Jonathan Rose for The Profit Surge Event, which aired this previous Monday.

Whereas I concentrate on long-term megatrends just like the $2 trillion AI infrastructure buildout, Jonathan zeroes in on the short-term “surge factors” that happen inside those self same developments — the moments when momentum and innovation collide. It’s how he’s noticed trades like +959% on Albemarle (ALB), +534% on MP, and +233% on Rigetti (RGTI) — all driving the AI wave.

Collectively, we revealed learn how to mix long-term conviction with short-term precision — the system for turning breakthrough applied sciences like Nvidia’s (NVDA) AI empire into fivefold revenue potential.

That is our blueprint for buying and selling the largest wealth occasion of our lifetimes. 

Click here to watch the replay and see how to capture the next AI-driven profit opportunity.

Sincerely,

Luke Lango

Editor, Hypergrowth Investing